Canada's auto union seeks new road map with potential merger

(Reuters) — Bev McCloskey had only been working at General Motors for a couple of weeks in 1949 when word went out that there was trouble on the line.

It was her first strike, but not her last. In those years, McCloskey and the other workers at GM's Oshawa, Ont. plants walked out over almost every contract, winning a string of concessions and forging Canada's most powerful union.

"In every strike we've ever had, we've made gains... until we had a good standard of living," says McCloskey, whose mother cleaned houses to support her five children in the years before GM turned Oshawa into a mini-Detroit. "We were middle class, you know. You could go travel."

Twenty-seven years after breaking away from the United Auto Workers (UAW), the once-mighty Canadian Auto Workers (CAW) may disappear, subsumed into a new mega union as jobs vanish in Central Canada's manufacturing sector.

The CAW's membership has fallen almost 30 per cent in the past six years, and its leaders see a merger with the Communications, Energy and Paperworkers (CEP) — another major private-sector union — as the best way to stay relevant.

"If unions do not change, and quickly, we will steadily follow U.S. unions into continuing decline," the two unions said in a joint discussion paper released last month. "We must reverse the erosion of our membership, our power, and our prestige."

In a move that underlines the seriousness of the threat, CAW and CEP leaders want to build a new 300,000-strong union, the private sector's largest by far, with a new name that has yet to be decided.

It would span more sectors, tap into sentiment that has driven the Occupy movement, and do more to appeal to non-unionized workers. The new union would also inherit CEP's strength in Alberta's oil industry, the strongest sector in the Canadian economy.

It is too early to say whether the plan will go ahead, let alone achieve its goals. But the combative CAW, which has long dominated collective bargaining in Canada thanks to its political savvy and financial clout, knows it has to change.

DOWNSIZING THE CAW

According to a government survey of major unions, the CAW's membership has fallen 28 per cent since 2006. The union says the decline is closer to 23 per cent, from 250,000 to 193,500 members. Either way, it has been a sharp, painful reversal.

After splitting with the UAW in 1985, the CAW increased its membership through 2004. Mergers brought in members in new sectors, from airport check-in staff to university lab assistants.

A well-paid membership and a centralized structure that let media-savvy national presidents speak on behalf of any local gave the CAW outsized political influence, which boosted its forays into other sectors.

It was a remarkable performance, given that overall Canadian unionization rates peaked in the 1980s. By contrast, the UAW diversified less, and its membership has fallen about 75 per cent over the last three decades.

The CAW has held more radical positions than the UAW, and it has taken over 42 smaller unions since 1985, mostly under its charismatic former national president, Buzz Hargrove.

Front and center in every CAW dispute from 1992 to 2008, Hargrove was prominent in mainstream politics and the labour movement, a tough-talking leader who was accessible to union members, management and media alike.

"You have to know Buzz," says Ken Lewenza, the CAW's current national president. "There was a natural attraction to the CAW. I mean, we didn't get 40 mergers, the majority of them under Buzz, without him reaching out and saying, 'you can do better with us'."

But now, Lewenza says, job losses are outpacing growth from organizing drives and mergers. That has hurt the union's revenue, especially since new recruits in the service sector earn less than auto workers. Since 2008, the CAW has trimmed its own head office staff through attrition.

The CEP merger talks, first acknowledged in December 2011 but not much discussed until the two sides launched slick joint websites last month, suggest that a gradual decline has reached a critical point.

"DRAMATIC STUFF"

Gary Chaison, a professor of industrial relations at Clark University in Worcester, Mass., says unions turn to big mergers when they are in trouble: "This is really dramatic stuff. This is where unions are going to have to give up some of their identity."

"Usually a merger is not the first course of action, but the last," he says. "It's something unions do very reluctantly."

CEP's membership has also fallen more than 20 per cent over five years, to about 110,000, as the pulp and paper industry has faded. The union, itself formed when three unions merged in 1992, is among Canada's largest, but with a highly decentralized structure, it lacks the CAW's political clout.

It's hard to fault any Canadian union for coveting the CAW's influence, if not its membership base. The labour movement feels under fire as governments step in more frequently to prevent labour disputes, and companies, hit by a strong Canadian dollar, push to cut costs.

That's something the CAW used to fight more or less successfully. Indeed, even as trade liberalization eroded organized labour's power through the 1990s, the CAW held onto its confrontational tactics, and its bargaining power.

Take October 1996: CAW Local 222 members took over GM's Oshawa north plant after they heard the company was planning to restart production during a strike over a new contract, potentially breaking the strike.

Gary Ainsworth, then a shop floor rep, recalls that a carefully selected group broke down the front door. Once management and security were out, Ainsworth circled the plant, welding doors shut.

It's difficult to imagine a similar scene playing out when Local 222 goes into talks this summer.

Foremost in CAW leaders' minds is Caterpillar Inc's Electro-Motive plant in London, Ont. On Jan. 1, the company locked out CAW members, demanding up to 50 per cent wage cuts. A month later, it shut the locomotive-making facility, laying off at least 450 workers. The next day, it hosted a job fair in Muncie, Ind.

"It's a highly competitive industry, and right now, at the current exchange rates, Canada is a high-cost producer," says Art Schwartz, a consultant and former GM negotiator. "I think they're being asked to kind of get in with everybody else."

In contract talks with the CAW this year, the Detroit Three automakers will push for performance pay, a concession the CAW, unlike the UAW, has resisted for decades. This time around, Chris Buckley, who heads up Local 222, will not rule it out. He worries about GM leaving Canada entirely.

Buckley, who with his handlebar mustache has been a fixture around the Oshawa plant for almost 30 years, doesn't see the next generation making the same gains he did. He wishes his daughter, who works in auto parts, was in another industry.

"I think we're going to scratch and claw for every job we hang on to for a very, very long time," he says.

A NEW UNION

Lewenza says the CAW has the resources to survive without CEP, but says the union should do something more ambitious — try to boost unionization rates nationally, and shift trade policy to protect high-quality jobs.

He emphasizes the political advantages of a merger. CEP organizes in the energy industry, including Western Canada's expanding oil sands, as well as at telecom giant Bell Canada. While the CAW's power is concentrated in Central Canada, a merged union would be a significant force across the country.

Dave Coles, CEP's president, focuses on the benefits of a merger in bargaining, building big strike funds and drawing on support from other sectors during long conflicts.

"In our union... there's a history of having industrial disputes that last a year or more, and winning them," he says.

Members may object, however. The CAW is highly centralized, unlike CEP. Also, CEP is aligned with the left-leaning New Democratic Party nationally, and in the province of Quebec with the separatist Bloc Quebecois and Parti Quebecois. The CAW has been more flexible, occasionally supporting Liberal Party candidates to counter conservative parties.

Any deal will require compromises on both sides.

"There's going to be a new name for this organization. Is the Canadian Auto Workers near and dear to my heart? Absolutely. But I can get over that," Buckley says.

Ainsworth, from the 1996 occupation, says he will trust Buckley. But he doesn't reach for upbeat talking points as quickly.

He grew up around the labour movement — his father once served 15 days in jail for joining another company's picket line in defiance of a court order.

Ainsworth became a union rep at GM and stuck with it even though it didn't win him many friends.

"I haven't thought of it a whole lot, but yeah, I hate to see it," he says of the merger. For a moment, he struggles for words. "I hate to see us have to join somebody to keep our head above water."